Public sector pay rise masks political row to come

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The Downing Street media grid must be a rather dismal affair these days, with announcements planned that barely get any attention at all thanks to a combination of Brexit and another minister being on the brink of resignation. But one story that has come off reasonably well is today’s public sector pay award. Ministers have confirmed that around one million workers in the health service, schools, armed forces and so on will receive a raise of between 1.5 and 3.5 per cent.

Obviously, this works nicely politically because everyone loves a pay rise. But the small print of this announcement reveals that it’s not going to make life dramatically easier for ministers. The Treasury press release says: ‘Today’s increases are funded from departmental budgets.’ Separately, Treasury ministers have been making very clear in Cabinet meetings that there will be no big funding deals for other departments along the lines of that awarded to the NHS recently. And so for departments to fund this pay rise, they will have to make cuts within their budgets.

These departments all have known budget problems. The Education department is part-funding the teachers’ pay rise, but has also assumed that schools will cover the first 1 per cent. Schools are already cash-strapped, with even leading ones having to drop subjects and restrict the number of public exams their pupils take, or ask parents for donations, either in cash or in the form of basics such as toilet roll. The knock-on effect of DfE or schools themselves having to restrict other budgets for the pay award will be noticeable.

Similarly, the Ministry of Justice has a pay rise for prison officers of at least 2.75 per cent this year. They deserve it, given the condition of many prisons at present, but the department is hardly awash with cash to improve those institutions.

Ministers were campaigning for more money for their departments, but are now faced with cutting even more in order to fund these pay rises. They know public sector workers have had to take a pay freeze for too long, but they also know that they will receive little long-term thanks when they reveal how they are going to fund the rises announced today. In the meantime, the Opposition can come up with all sorts of dark threats about the sort of well-loved schemes that might be in the firing line.